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12 years since the collapse of Ansett, which ushered in a decade of near-monopoly dominance for Qantas, the expansion of Virgin Australia is undeniably putting competition back into the business travel equation.
But it’s also seen Australia’s aviation industry return to what is ostensibly a two-airline duopoly of Qantas and Virgin Australia.
While the two carriers tussle over the mainstream travel market, they’re also set to square off in the regional and low-cost sectors following Virgin Australia’s takeover of Perth-based Skywest and Tiger Airlines Australia.
However, Virgin Australia CEO John Borghetti says that concerns over the new duopoly are unfounded, and that it’s “chalk and cheese” compared to the old days of Qantas and Ansett.
“We should draw the distinction between the duopoly that was, and the duopoly that is” Borghetti tells Australian Business Traveller.
“The duopoly that was, saw two fully-fledged carriers covering all market segments.”
“Today we have two full service airlines at the top end, we have two budget carriers, and we actually have more than two regional providers.”
“So there’s actually more than two airlines and they’re covering very different market segments.”
Borghetti also sees Australia’s population as capping the number of profitable players in the aviation industry.
“Remember, we have a population of 23-24 million people – that’s not a lot of people in a country our size, and there’s a finite number of people that can sustain (airlines).”
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Is Borghetti right? Is Qantas-Virgin a better duopoly than Qantas-Ansett, or is just the lesser of the two-player evils? Share your thoughts below.